Tesla's Robotaxi Launch In June Will Likely Be A 'Non-Event,' Says Gary Black: 'This Isn't Really A Test Market. It's An Experiment'

Noted investor Garry Black has expressed skepticism about the upcoming launch of Tesla Inc.‘s (NASDAQ:TSLA) robotaxi service in Austin, describing it as an “experiment” rather than a market test.

What Happened: In a post on X on Thursday, Black pointed out that the initial deployment of only 10-20 robotaxis in Austin does not constitute a significant market test. “This isn't really a test market. It's an experiment,” he wrote.

Black’s comments came in response to Tesla CEO Elon Musk‘s announcement on the company’s Q1 earnings call that the robotaxi launch would be limited in scope.

Black’s skepticism is rooted in the perceived high risks and limited scalability of Tesla’s autonomous technology. He also noted Tesla’s choice of Austin for the launch, a city with more relaxed autonomous vehicle regulations compared to other states where competitors like Alphabet‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) Waymo and Cruise have undergone extensive testing before launching their services.

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Why It Matters: Tesla has begun running its employee-only autonomous ride-hailing service in Austin and the San Francisco Bay Area, completing over 1,500 trips and covering a distance of 15,000 miles. However, questions about Tesla’s readiness for autonomous driving technology have surfaced, especially after experts found the 2024 Cybercab demonstration in Los Angeles to be underwhelming.

Black had previously highlighted Tesla’s planned autonomous ride-hailing service in Austin as a significant development, calling it “probably the most bullish thing” from Tesla's fourth-quarter earnings call. However, he raised concerns over automotive profit margins and the design of the upcoming affordable electric vehicle. His latest comments also reflect a more cautious stance.

In March, former Waymo CEO John Krafcik also expressed doubts about Tesla’s readiness to roll out its robotaxi service, criticizing the Cybercab’s design and arguing that the company lacks the necessary technology to operate a safe and effective autonomous taxi fleet.

On a year-to-date basis, Tesla stock slumped over 33%, according to data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.